Brazil Inflation Returns to Central Bank’s Target Range

Brazil's annual inflation rate eased to 4.44% in July 2026 from 4.64% in June, in line with forecasts and moving back within the central bank's target range of 1.50%-4.50%. Price growth slowed for food and beverages (3.40% vs. 3.82% in June), clothing (3.87% vs. 3.99%), transport (3.64% vs. 3.95%), health and personal care (6.16% vs. 6.21%), personal expenses (5.22% vs. 5.79%), and education (6.27% vs. 6.33%). The moderation in transport costs was partly driven by slower fuel inflation, which eased to 4.43% from 5.28%, as global oil prices retreated from recent highs amid hopes for a US-Iran peace deal and the normalization of Middle Eastern supply. On a monthly basis, consumer prices rose 0.1%, following a 0.2% increase in June, while inflation reached 3.44% year to date.

Brazil's annual inflation rate eased to 4.64% in June 2026 from 4.72% in May, below market expectations of 4.80%. Price growth slowed for food and beverages (3.82% vs. 3.87%), housing (5.85% vs. 6.22%), clothing (3.99% vs. 4.60%), transport (3.95% vs. 4.05%), and education (6.33% vs. 6.36%). Meanwhile, inflation accelerated for household articles (0.69% vs. 0.54%), health and personal care (6.21% vs. 6.04%), personal expenses (5.79% vs. 5.77%), and communication (1.83% vs. 1.75%). Energy and fuel inflation remained elevated at 7.71%, reflecting supply disruptions linked to the closure of the Strait of Hormuz during the US-Iran conflict, although it eased from 8.90% in May as geopolitical tensions showed signs of moderating. On a monthly basis, consumer prices rose 0.16%, following a 0.58% increase in May.

Brazil’s annual inflation rate rose to 4.72% in May 2026 from 4.39% in the previous month, slightly above forecasts of 4.66%, and marking the highest since September 2025. Price pressures intensified for food and beverages (3.87% vs 0.69%), housing (6.22% vs 6.19%), clothing (4.60% vs 4.38%), health and personal care (6.04% vs 5.66%), personal expenses (5.77% vs 5.71%), and communication (1.75% vs 1.59%). Energy and fuel inflation remained elevated at 8.90%, edging up from 8.80% in April, reflecting supply disruptions caused by the closure of the Strait of Hormuz amid the US-Iran conflict. However, motor fuel prices rose at a slower pace, increasing 5.34% compared with 6.67% in the previous month. Meanwhile, inflation eased slightly for transportation (4.05% vs 4.15%) and education (6.36% vs 6.41%).